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Jon Namba is an independent industry consultant, trainer and speaker. He recently completed a term as the president of the NWFA Certified Professionals. His background includes roles as an installer, former WFCA director of technical services and former CFI executive director.

The Infamous Lien Waiver: Does It Really Protect Contractors?

Before starting on a project, make sure it meets industry standards. If you have concerns, bring them up before the installation starts. Once you’ve begun, it’s going to be difficult to get anyone to sign any type of waiver.

Lien waivers have been used for years by contractors to sign off on a job they normally wouldn’t accept, but when it comes to litigation do they hold up in a court of law? To be frank, not in very many cases. When a retailer or contractor tries to absolve themselves from any liability by stating that they will not cover any failures with a lien waiver, judges and attorneys can argue that the contractor/retailer still has liability. If the retailer/contractor knowingly admits that there are issues with the installation and wants a waiver signed, this is where the concerns with the document start.

First, if there are issues and concerns with the installation and the case goes to litigation, a judge or attorney would ask the question, “Are you considered a professional in your trade?” If the answer is yes, then the next question is, “If you knew there were concerns with the project and if you knew there could be potential consequences, then why did you proceed and why did you let someone dictate to a professional how you would do your job?”

The answer typically is that the general contractor pushed them to proceed with the installation so they could complete the project and get paid, not worrying about any latent installation concerns. And yes, we hear about the strong-arm tactics of many general contractors who threaten the retailer/contractor with statements like “If you don’t do the work, I’ll get someone else to finish it and back-charge your company for failing to fulfill your contract!” Unfortunately, while this answer is honest, it doesn’t sidestep a contractor/retailer’s liability for knowingly agreeing to a job that didn’t meet industry standards.

Our business has the same headaches as any contractor/retailer with concerns about site conditions and general contractors/building owners pushing to get their projects completed. I was frustrated for years in trying to figure out what we could do to help protect our company. One day I was speaking with my friend Darwin, who is an attorney. He said, “Jon, let’s write you up a Notice, Protest and Assumption of Risk Statement for your company.”

I asked, “So what exactly is that?” Darwin’s response was that it’s still a type of waiver, but the way it’s written in legal language gives it a lot more credibility in a court of law. Now mind you, this doesn’t mean that someone can’t take you to litigation—but what this document does is keep your credibility as a professional, and that you addressed the concerns and all the involved parties agree to proceed with the installation knowing these concerns. I’ve attached a copy of what our company uses and get requests to send this out to retailers and installers whenever I do presentations, so I thought I would just attach it to a blog.

A few critical things to remember even with this type of document:

Have the discussion about any issues prior to starting the installation. Once you start, it’s hard to get anyone to sign.

Make sure the individuals signing are authorized to sign for the company they represent.

Have an attorney review the document to make sure it works for your company.

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Jon Namba is an independent industry consultant, trainer and speaker. He recently completed a term as the president of the NWFA Certified Professionals. His background includes roles as an installer, former WFCA director of technical services and former CFI executive director.